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Frank schedules hearing on CRA perspectives

WASHINGTON (4/9/10)—The House Financial Services Committee will take a look at “perspectives and proposals” related to the Community Reinvestment Act (CRA) during an April 15 hearing. The session is scheduled for 10 a.m. (EDT) and a witness list has yet to be announced. In March, during a hearing on community development financial institutions, House Financial Services Committee Chairman Barney Frank (D-Mass.) suggested that he and committee colleague Rep. Maxine Waters (D-Calif.) would soon re-examine and consider expanding the reach of CRA. CRA was enacted in 1977 in response to a practice known as “redlining,” which refers to the failure to lend to lower-income and minority neighborhoods by banks and thrift institutions during the 1960s and early 1970s. The purpose of the law is to ensure that for-profit financial institutions adequately meet the financial service needs of all parts of the communities from which they draw deposits. The Credit Union National Association (CUNA) opposes any effort to include credit unions under CRA requirements. CUNA maintains that by their nature and mission of “people helping people,” credit unions already meet the financial needs of a broad spectrum of people that fall within their fields of membership, and play an active role in community development and growth. By virtue of their membership requirements, credit union products and services are offered within local communities and CRA requirements would add an unnecessary and costly regulatory burden to credit unions that already meet and exceed the intent behind CRA, CUNA says.